McFall v. Ford ( 1931 )

The opinion of the court was delivered by

Burch, J.:

In the original brief for appellants appears the following: .

“The basic error which accounts for the inequitable judgment in this case is the failure, in considering the effect of a foreclosure sale, to mark the difference between a foreclosure sale which culminates in a sheriff’s deed, with all its consequences, and a foreclosure sale which is canceled by redemption under R. S. 60-3439 and 60-3440 of the redemption act, and thereby loses all its efficacy to effect the title to the real estate.”

“The word ‘sold’ or the word ‘sale’ cannot be interpreted or construed by the court to apply to an ‘uncompleted’ or ‘.canceled’ sale.”

“The word ‘sold’ as used in the statute is to be construed with its usual and natural signification. The statute must be construed in accordance with the intention of the legislature therein expressed. The word ‘sold’ as used means a completed sale and where a sheriff’s deed is issued conveying the land. It does not mean a canceled and annulled sale. The ‘sheriff’s sale’ does not sell anything, he merely offers the land for sale, subject to the rights of redemption, and accepts a bid, . . . No sale has been made. The entire matter is in abeyance. When the court confirms no sale has yet been made.”

The petition for rehearing is quite largely devoted to the same subject. On page after page it is declared in terms or effect that there is no sale unless what was done by way of sale was completed by sheriff’s deed; that redemption automatically cancels and annuls what was done by way of sale; that there was no transfer of property, because the defendant owner’s transferee redeemed; and that the Thomas lien remained precisely the same as if nothing had been done by way of sale. The petition for rehearing also contains the following:

“The questions involved in the case at bar require that the court place a construction on and define the word ‘sold’ as used in R. S. 60-3460. Appellants therefore respectfully request the court to define what constitutes a ‘sale’ or the word ‘sold’ under said section R. S. 60-3460.”

The section referred to reads as follows:

“Real estate once sold upon order of sale, special execution or general execution shall not again be liable for sale for any balance due upon the judgment or decree under which the same is sold, or any judgment or lien inferior thereto, and under which the holder of such lien had a right to redeem within the fifteen months hereinbefore provided for.” (R. S. 60-3460.)

The words “sale” and “sold,” as used'in the statute, refer to certain operative facts in the execution by the sheriff of sale process. The legal consequences of these facts may or may not result in conveyance effecting permanent transfer of property. Operative facts and legal consequences of those facts are wholly distinct and different things.

In a foreclosure case the sheriff conducts a land auction, held at the courthouse door. A bid for the land is made, or bids are made. The sheriff accepts the bid, or a bid, strikes off the land to the bidder, and the bidder pays the amount of the bid in money, or partially in money and the remainder constructively. Those facts constitute what the statute treats as a sale and what the statute calls a sale. What the statute treats as a sale, and calls a sale, is a sale for all purposes of the statute.

After what the statute calls a sale, certain things must be done, and other things may be done. The sheriff must make return of the sale to the court. If the court finds the sale has been properly made, the court confirms the sale. If after a sale the real estate sold is not subject to redemption the sheriff executes a deed to the purchaser effective to transfer title to him. If the sale is subject to redemption the sheriff executes a certificate of sale and gives it to the purchaser. The defendant owner may redeem from the sale, and certain creditors may redeem from the sale. If the owner redeems from the sale the sheriff may not do again what he did before to satisfy any balance due on the judgment or decree under which he first acted, or to satisfy any inferior lien, if the holder had a right to redeem. There is no mystery about this, and definitions of the word “sale,” as applied to general contract transactions, have no application.

The statute prohibits resale in two classes of cases: first, to satisfy a balance due on the judgment under which .the sale was made, and second, to satisfy inferior liens. Land is sold to satisfy a foreclosure judgment of .$10,000. The land sells for $5,000 and costs and taxes, and a certificate of purchase is issued to the purchaser. The defendant owner redeems by reimbursement of the amount of the certificate of purchase, with interest. If the argument made in the petition for rehearing were sound there was no sale, the lien of the foreclosure judgment was not affected, although half of it was satisfied, and the land could be sold again to satisfy the remainder. The statute was enacted to prevent that, and was just as specifically enacted to prevent resale to satisfy inferior liens.

The history of the legislation demonstrates the legislative intention. It was a matter of common knowledge that previous to enactment of the redemption law it was the practice of judgment creditors in mortgage-foreclosure cases to bid small sums, get the land, and still hold large judgment balances over the heads of mortgagors. When the legislature of 1893 met a redemption law was introduced in each house. The senate bill was the first to pass. When it was considered in the house, all after the enacting clause of the senate bill was stricken out, and the house bill was substituted. As thus amended the senate bill was passed by the house. After minor changes in conference, not affecting the resale section, the senate accepted the amendment. The original senate bill provided that land once sold could not be sold again to satisfy any balance due on the judgment pursuant to which the sale was made. The senate bill also provided the land could not be sold again to satisfy any inferior judgment or lien, within a year. Section 23 of the house bill, which became section 23 of the amended senate bill, is R. S. 60-3460, and so far as the legislative records show, no member of either house offered an amendment to that section, although a number of amendments to other sections were proposed.

The petition for rehearing renews and enlarges upon the contention that the judgment of the district court in this action deprived Mrs. Thomas of vested rights.

As indicated in the orginal opinion, the vested rights of Mrs. Thomas were those which accrued to her under the law as it stood when her judgment was rendered in 1928. The redemption statuté was passed in 1893.

The redemption statute was different from any statute in existence when it was enacted, and made a radical change in the law of this state. It is idle for the petition for rehearing to cite decisions which did not and could not take this statute into account. Likewise it is idle for the petition for rehearing to ignore the facts and the law, and argue from the premise that Mrs. Thomas was not a party to the foreclosure actions. The only purpose of making her a party would be to adjudicate rank of liens. She was not a necessary, proper or permissible party to the actions because she acquired no lien to be affected by the actions previous to the day judgment was rendered in the actions. The petition for rehearing states that she has never contended her judgment lien was superior to the judgment liens of the federal land bank. That her lien was an inferior lien is an undisputed fact, and was an indisputable fact. So, her rights, whatever they were, accrued with rendition of her judgment. Those rights are enumerated in the original opinion, and the only question which could arise under the statute as interpreted by the court is, Was the Jaw valid as to an inferior lien holder? The purpose of the law was to get the last cent of value out of land to apply on liens, and when that was done, to protect that land from being taken again and again from an owner who tried to save it by redemption. The statute was therefore an exemption law, enacted in the interest of the public welfare. Thirty-eight years’ experience in its administration have demonstrated its social and economic soundness, and the court holds it is legally sound.

Other contentions made in the petition for rehearing do not require discussion, and the petition for rehearing is denied.